Know they neighbor: Zillow adds public data on homes in foreclosure but not yet for sale

A Cook County sheriff's deputy puts a foreclosure notice on the door of a Chicago home. (Nancy Stone/Chicago Tribune photo)

Zillow is displaying detailed information on about 1.5 million homes that are in foreclosure but not yet for sale, in a bid to position itself as the go-to website for homebuyers.

All the data that Zillow is making available is public information, but until now, accessing it typically required buying a subscription to a website or a trip to county courthouses, digging through individual case records. By putting such personal data at consumers' fingertips, the Seattle-based realty website acknowledges it may face criticism regarding privacy concerns.

Cataloging distressed homes that aren't listed for sale may make it easier for buyers to approach would-be sellers and strike private deals, avoiding real estate commissions. But providing a clear picture of the financial struggles associated with a particular property also could make it easier for a buyer to underbid on a home.

Zillow views its latest site enhancement, which went live late Wednesday, similarly to when it shook up the real estate market in 2006 by debuting a site that listed individual home values, called "Zestimates," of for-sale and not-for-sale homes. The site today has information on more than 110 million properties. In 2006, the stated goal was to make potential homebuyers more market-savvy shoppers. It doesn't see the addition of foreclosure data any differently.

"It's all part of the public record, and what the buyer chooses to do with information is up to them and their real estate agent," said Amy Bohutinsky, Zillow's chief marketing officer. "Ultimately, what we're trying to do is help buyers get a better picture."

Anyone who logs in with a free account will have access to the information, which also will include completed foreclosures that have not been listed for sale. Like Zillow's current system, users can search by ZIP code, city or a specific address.

The homes listed in premarket inventory are properties for which a foreclosure has been filed against the borrower but the action is not resolved. Among details available for each property will be the address, the date and amount of the original mortgage, the unpaid balance and the dollar amount past due. It also will show the party that initiated the foreclosure action, an estimate of what the foreclosure sales price might be based on, the sales prices of nearby foreclosures and details of where it is in the process.

If the home was previously listed on Zillow as a for-sale home, that picture will be used. Otherwise, there will be a satellite view of the neighborhood.

The borrower's name will not be listed.

When the additional information was added to the site late Wednesday, it included 11,000 premarket single-family homes and condominiums within the city of Chicago.

Home shoppers have a need for the extra information, according to Bohutinsky. The dearth of available homes listed for sale is constraining the housing market at a time when there are indications the market has bottomed nationally and mortgage rates remain well under 4 percent for a 30-year, fixed-rate loan.

"What buyers can learn from this is what homes might be listed for sale soon, or they can actually try and buy the home out of the foreclosure process by making an offer to the owner or the bank," she said. "It opens up a whole new category of inventory to people that they didn't know existed."

That so-called shadow inventory has been on the minds of real estate agents for years as they waited for properties in foreclosure to make their way through the process and return to the market for resale. Foreclosure proceedings first slowed because of the volume of cases, and more recently because of various state and federal investigations into how banks handled the cases. With many of those probes behind the mortgage lending industry, lenders are again seeking to push foreclosure cases through the system.

Still, according to RealtyTrac, it takes an average of almost two years to foreclose on a home in the Chicago area, so a property listed in Zillow's premarket inventory could be there awhile before it is officially listed for sale.

On Thursday, RealtyTrac reported that foreclosure activity in the Chicago area rose 34 percent from the third quarter in 2011. During the past three months, notices of default, the first step in the foreclosure process, were filed against 18,923 homes locally.

As information on those properties is entered in court databases, it will be added to Zillow's site, which will be updated daily.

The company calls the addition of premarket inventory a step forward in "consumer empowerment." Housing advocacy groups and counselors aren't so sure.

"While generally speaking we support disclosure of public data, there is a big leap from the general case to a specific one," said Katie Buitrago, a senior policy associate at the Woodstock Institute, a Chicago-based research and public policy group.